© strawberrywaffles 2025
Express trusts
Two ways to create:
- Self-declaration of trust (settlor becomes trustee)
o Settlor retains legal title
o B has beneficial & equitable ownership
- Transfer on trust (third party becomes trustee)
o Settlor transfers legal title to third party (trustee)
o Settlor has no interest
o B has equitable & beneficial ownership
▪ Note: in some cases, the settlor will be the B
Requirements for express trusts:
- Three certainties of intention, subject matter (trust property), objects (Bs)
- Beneficiary principle: objects must be legal persons
o Exceptions: charitable & non-charitable purpose trusts
- Perpetuity rules
- Formalities
- Registration – online Trusts Registration Service (TRS)
If there is no express trust, there is simply an outright gift of legal title.
Three certainties
If no three certainties, trust is void and fails ab initio.
- Self-declaration of trust: S keeps the property
- Trust by transfer: T holds the property on a resulting trust for S or S’ estate
- Testamentary trust:
o No certainty of intention (someone is intended to receive something): gift
(executors not required to transfer legal title to the intended trustee)
o No certainty of subject matter/objects: property forms part of the residuary
estate
,© strawberrywaffles 2025
Certainty of intention
Objective approach (subjective intention not relevant).
- Use of the word “trust” not relevant
- Expressing a hope/desire that T acts a certain way without imposing a legal
obligation → likely no trust
o E.g. “in full confidence to do what is right”, “as she thinks fit”
- Must impose a legal duty e.g. “I hereby direct…”
- Combination of both precatory and mandatory language → trust intended
Case law:
- “this money is just as much yours as is mine” (domestic context), both uneducated
(doesn’t know what a trust is) and relationship (cohabitees) between parties → trust
- Both parties paid additional sums from their joint venture (playing bingo) into
separate bank account, regarding any winnings as theirs jointly, and applied the
sums for their joint benefit → trust
- Told girlfriend verbally that he “bought property for her to live in for the rest of her life,
but he will give it to his grandchildren”, then acted inconsistently by transferring the
property to his daughter → no trust
- Sham trust → no trust
o Settlor continued to represent himself as full beneficial owner
o Settlor retains control over trust property
- Separation of assets → likely to have trust
o E.g. rent payments collected in a separate bank account
o Separation of assets is not, by itself, sufficient to find certainty of
intention
o NB: mixing of assets is not fatal to finding a trust e.g. trustee adds settlor’s
funds to trustee’s assets, then makes investments to be held separately from
trustee’s own assets
Certainty of subject matter
Two requirements:
- Trust property must be identifiable
- Must be possible to ascertain beneficiary’s interest in trust property
,© strawberrywaffles 2025
o E.g. trust over two cars for A and B, with a power to C to determine which car
should be held for A and which for B → if C dies before choosing, the trust will
fail (cannot determine which beneficiary is entitled to which car)
o In the absence of an express statement as to beneficial entitlements, it is
presumed that they will hold the shares equally
Not fatal to the trust that T can deal with the trust property as long as the trust property is
later reconstituted.
Valid trust property Not valid trust property
- “Half of the residue” - Uncertain e.g. “bulk of
- Personal contractual rights the residue”, “net
- Proprietary rights assets”
- Tangible goods that have been earmarked for - Trust property that did
the trust & segregated from other assets not exist at the time the
o E.g. 1,000 acres out of 2,000 acres of trust was declared
land → 1,000 acres must be earmarked - Money paid into an
o Earmarked: put aside in a different space overdrawn bank account
/ identified via contract - 1 out of 4 diamonds
o Does not matter if they are (tangible goods), if the 1
interchangeable (e.g. gold bars) diamond has not been
- “3% of its revenue”, if there is a separate earmarked and
account set up for this money separated from other
- “20% of 200 shares” – must be a fixed number assets
of shares of the same class from the same
issuer (wider mass of assets must be
identified)
- Intangible & fungible (interchangeable)
goods do not need to be earmarked e.g. “20
out of 200 shares” where the shares are all of
the same class from the same company (bulk
must consist of identical assets)
- “a reasonable income” to beneficiary – can be
determined by beneficiary’s current standard of
living
, © strawberrywaffles 2025
20% of 200 shares means B shares in any profits/losses every time the trustee sells shares
→ B is beneficially entitled to settlor’s chose in action against the company, as equitable
tenants-in-common.
Certainty of objects
Fixed trusts
If intended to have multiple Bs, but there is uncertainty to one/more of those Bs, trust will not
fail completely – identifiable Bs can still take their beneficial entitlement.
Requirements:
- Conceptual certainty: “complete list” test – must identify all Bs
o Exception: gifts subject to a condition precedent e.g. “friend”, “any member of
my family or any friends or mine”, “the eldest of X’s sons who goes to church”
- Evidential certainty:
o Trust for employees, but no records of employees → invalid trust
Powers of appointment (not mandatory to exercise power)
Requirement: “is or is not” test.
- Administrative workability not a problem – can be a power to appoint property to
anyone in the world
Discretionary trusts
Requirements:
- Conceptual certainty: “is or is not” test (given postulant test)
o “employees”: certain, if it specifically refers to apply to current/past/future
employees
o “children”: certain (follow legal meaning – adopted children are legally
children, step-children are not)
o “friends”: not certain
o “relatives”: certain – descendants from a common ancestor
- Evidential certainty: if it cannot be proven that a given individual is in the class, he is
taken as being outside the class
o Can be resolved by opinion clauses e.g. “in the opinion of my trustees”
Express trusts
Two ways to create:
- Self-declaration of trust (settlor becomes trustee)
o Settlor retains legal title
o B has beneficial & equitable ownership
- Transfer on trust (third party becomes trustee)
o Settlor transfers legal title to third party (trustee)
o Settlor has no interest
o B has equitable & beneficial ownership
▪ Note: in some cases, the settlor will be the B
Requirements for express trusts:
- Three certainties of intention, subject matter (trust property), objects (Bs)
- Beneficiary principle: objects must be legal persons
o Exceptions: charitable & non-charitable purpose trusts
- Perpetuity rules
- Formalities
- Registration – online Trusts Registration Service (TRS)
If there is no express trust, there is simply an outright gift of legal title.
Three certainties
If no three certainties, trust is void and fails ab initio.
- Self-declaration of trust: S keeps the property
- Trust by transfer: T holds the property on a resulting trust for S or S’ estate
- Testamentary trust:
o No certainty of intention (someone is intended to receive something): gift
(executors not required to transfer legal title to the intended trustee)
o No certainty of subject matter/objects: property forms part of the residuary
estate
,© strawberrywaffles 2025
Certainty of intention
Objective approach (subjective intention not relevant).
- Use of the word “trust” not relevant
- Expressing a hope/desire that T acts a certain way without imposing a legal
obligation → likely no trust
o E.g. “in full confidence to do what is right”, “as she thinks fit”
- Must impose a legal duty e.g. “I hereby direct…”
- Combination of both precatory and mandatory language → trust intended
Case law:
- “this money is just as much yours as is mine” (domestic context), both uneducated
(doesn’t know what a trust is) and relationship (cohabitees) between parties → trust
- Both parties paid additional sums from their joint venture (playing bingo) into
separate bank account, regarding any winnings as theirs jointly, and applied the
sums for their joint benefit → trust
- Told girlfriend verbally that he “bought property for her to live in for the rest of her life,
but he will give it to his grandchildren”, then acted inconsistently by transferring the
property to his daughter → no trust
- Sham trust → no trust
o Settlor continued to represent himself as full beneficial owner
o Settlor retains control over trust property
- Separation of assets → likely to have trust
o E.g. rent payments collected in a separate bank account
o Separation of assets is not, by itself, sufficient to find certainty of
intention
o NB: mixing of assets is not fatal to finding a trust e.g. trustee adds settlor’s
funds to trustee’s assets, then makes investments to be held separately from
trustee’s own assets
Certainty of subject matter
Two requirements:
- Trust property must be identifiable
- Must be possible to ascertain beneficiary’s interest in trust property
,© strawberrywaffles 2025
o E.g. trust over two cars for A and B, with a power to C to determine which car
should be held for A and which for B → if C dies before choosing, the trust will
fail (cannot determine which beneficiary is entitled to which car)
o In the absence of an express statement as to beneficial entitlements, it is
presumed that they will hold the shares equally
Not fatal to the trust that T can deal with the trust property as long as the trust property is
later reconstituted.
Valid trust property Not valid trust property
- “Half of the residue” - Uncertain e.g. “bulk of
- Personal contractual rights the residue”, “net
- Proprietary rights assets”
- Tangible goods that have been earmarked for - Trust property that did
the trust & segregated from other assets not exist at the time the
o E.g. 1,000 acres out of 2,000 acres of trust was declared
land → 1,000 acres must be earmarked - Money paid into an
o Earmarked: put aside in a different space overdrawn bank account
/ identified via contract - 1 out of 4 diamonds
o Does not matter if they are (tangible goods), if the 1
interchangeable (e.g. gold bars) diamond has not been
- “3% of its revenue”, if there is a separate earmarked and
account set up for this money separated from other
- “20% of 200 shares” – must be a fixed number assets
of shares of the same class from the same
issuer (wider mass of assets must be
identified)
- Intangible & fungible (interchangeable)
goods do not need to be earmarked e.g. “20
out of 200 shares” where the shares are all of
the same class from the same company (bulk
must consist of identical assets)
- “a reasonable income” to beneficiary – can be
determined by beneficiary’s current standard of
living
, © strawberrywaffles 2025
20% of 200 shares means B shares in any profits/losses every time the trustee sells shares
→ B is beneficially entitled to settlor’s chose in action against the company, as equitable
tenants-in-common.
Certainty of objects
Fixed trusts
If intended to have multiple Bs, but there is uncertainty to one/more of those Bs, trust will not
fail completely – identifiable Bs can still take their beneficial entitlement.
Requirements:
- Conceptual certainty: “complete list” test – must identify all Bs
o Exception: gifts subject to a condition precedent e.g. “friend”, “any member of
my family or any friends or mine”, “the eldest of X’s sons who goes to church”
- Evidential certainty:
o Trust for employees, but no records of employees → invalid trust
Powers of appointment (not mandatory to exercise power)
Requirement: “is or is not” test.
- Administrative workability not a problem – can be a power to appoint property to
anyone in the world
Discretionary trusts
Requirements:
- Conceptual certainty: “is or is not” test (given postulant test)
o “employees”: certain, if it specifically refers to apply to current/past/future
employees
o “children”: certain (follow legal meaning – adopted children are legally
children, step-children are not)
o “friends”: not certain
o “relatives”: certain – descendants from a common ancestor
- Evidential certainty: if it cannot be proven that a given individual is in the class, he is
taken as being outside the class
o Can be resolved by opinion clauses e.g. “in the opinion of my trustees”
